Bank of America suspends senior FX trader in London: source

Jamie McGeever

3 Min Read

LONDON (Reuters) - The worldwide investigation into allegations of manipulation in the global currency market took another twist on Thursday, as Bank of America suspended a senior trader in London, a source familiar with the matter said on Thursday.

Customers are seen outside of a Bank of America in Tucson, Arizona January 21, 2011. REUTERS/Joshua Lott

Bank of America-Merrill Lynch, the investment banking arm of the second largest U.S. lender, suspended Joseph Landes, head of spot trading for Europe, Middle East and Africa, as the bank carries out its investigations.

Landes couldn’t be reached immediately and Bank of America declined to comment.

It adds Bank of America’s name to the growing list of big banks including Citi, JP Morgan Chase, Barclays and UBS who have put on leave, suspended or fired more than 20 traders since the middle of last year.

The Bank of England on Wednesday suspended an employee as part of an internal probe into what Bank officials knew about alleged manipulation of key currency rates by traders.

The BoE also released on Wednesday minutes of meetings between its FX officials and chief dealers in London stretching back over several years that showed concerns over possible manipulation were raised as far back as 2006.

Regulators have said the alleged manipulation of the $5.3 trillion-a-day market - by far the world’s largest financial market - is as bad as the Libor interest rate rigging which has resulted in banks shelling out $6 billion in fines and settlements and criminal cases against some individuals.

“This is Libor revisited, this is going to run and run. And remember, we’re still dealing with Libor,” said Mark Garnier, Conservative member of parliament and member of the Treasury Select Committee (TSC).

BoE Governor Mark Carney and other Bank officials will make a scheduled appearance before the TSC on Tuesday and are bound to face questions on the Bank’s probe.

The global investigation into manipulation allegations centre on the so-called “London fixing” that is set daily. It is used to price trillions of dollars’ worth of investments and deals and is relied upon by companies, investors and central banks.

Britain’s Financial Conduct Authority (FCA) and the U.S. Department of Justice are among several authorities around the world looking into allegations that senior FX traders shared market-sensitive information relevant for the London fix.

London is the hub of the global currency market, accounting for some 40 percent of the $5.3 trillion traded on an average day.